Nokia buys online video and photo service Twango

It’s been just nine months since Twango launched its free online photo and video sharing service. But in that short period, the Redmond startup has attracted tens of thousands of users and the attention of one very large mobile phone company.

Finland-based Nokia today plans to announce that it is acquiring the 10-person startup in a deal that Twango co-founder Serena Glover said is a “tremendous opportunity.”

Twango decided to sell, rather than going it alone, because of the financial wherewithal and distribution power of Nokia. It also wanted to allay concerns of customers who use Twango’s photo and video service.

Twango co-founder Serena Glover

“When it comes to customers storing and sharing their personal memories, they are always a little nervous about a startup,” she said. With Nokia firmly behind the company, Glover said they can now provide a comfort level to consumers that their data will be secure.

Terms weren’t disclosed, though Glover – who along with four other former Microsoft employees bankrolled the company since its founding in July 2004 – said it was a positive financial result for everyone involved. The Wall Street Journal, citing a source familiar with the deal, said that the purchase price was less than $96 million.

The acquisition will mean a radical change for Twango, which for the past three years has operated out of Glover’s basement. With the support of Nokia, the company plans to move to new offices in Bellevue next week and begin an aggressive hiring spree. Glover said there are plans to at least double the staff in the coming months. Though she did not have exact numbers on staffing or office space, Glover said Nokia is “planning big.”

Twango competes in the super-crowded sector of digital media sharing, helping consumers store personal photos and videos on their computers. It also allows consumers to access those videos and photos on select mobile devices, one of the big reasons that Nokia started talking to the company last October. Yahoo’s Flickr, Google’s YouTube and Fox Interactive’s Photobucket are just a few of the competitors attacking the market. Locally, startups such as Treemo and Ontela also are trying to make it easier for people to access photos on mobile devices.

In fact, Gerard Wiener, vice president of multimedia mergers and acquisitions, said he kicked the tires on about 75 other photo and video services before choosing Twango.

“From that big batch of companies, we were looking for four main things: good team, good technology, good product and strategic fit,” he said. “After all was said and done, Twango turned out to be, by far, the best candidate for us.”

Wiener said that Nokia is already the largest camera manufacturer in the world, so a mobile photo sharing service that integrates with personal computers “makes perfect sense.” A Nokia phone user, for example, could snap photos or videos while at a sporting event and have those images integrated with one’s personal online photo collection at Twango’s Web site. It also works the other way, so mobile phone users who wanted to access images from the PC could do so from their phone.

Twango works on most mobile phones that have e-mail capability, with users able to send images to specific channels that they have set up. Glover stressed that the service will continue to operate as an open platform, with support for other handsets in addition to those sold by Nokia. But she also added that there will be tight integration with Nokia to capitalize on their “hundreds of millions of customers worldwide.”

Wiener said Nokia has “some serious ambitions to roll this out on a global scale,” adding that they plan to increase hiring around the Twango service.

“The Seattle area, frankly, is very, very strong in talent … and so it just makes perfect sense from this particular acquisition’s perspective to not only have the nucleus there but to build around it,” he said.

This isn’t the first time that Nokia has purchased a Seattle area Internet company. Last summer, it completed a $60 million buyout of digital music service Loudeye.

The moves into mobile content – through purchases of Loudeye and Twango – could position Nokia as a bigger competitor to wireless carriers, which also are aggressively rolling out new digital media services. Wiener said that Nokia continues to consult with carriers about what it is doing in the mobile Internet services arena.

“The attitude has actually been pretty positive and pretty welcoming,” said Wiener of the discussions with carriers..”As long as consumers want it, I don’t think the operators want to stand in the way of consumer choice.”

Glover, who will take on the title of director of service operations at Nokia, declined to say how much the founders sank into Twango. But she said they are “thrilled” with the result, adding that Nokia “had a very similar vision to ours.”

Twango had planned to make money through online advertising, photo printing and subscriptions for additional services. The company also has received a lot of requests from customers about back-up DVDs, a service that is not currently available on Twango but Glover said is “something on our roadmap.”

Interestingly, the sale of Twango marks the third Seattle area Internet company – operating from a home office with little outside investment capital – that has been sold to a publicly-traded firm in the past five days. Late last week, Vashon Island’s Recipezaar was sold to E.W. Scripps and Bellevue’s PremierGuide was sold to Local.com.